Journal of Research and Development
Open Access

Advantages of Strategic Alliances in Research and Development

Hiromi Nagaumi^{* *}Correspondence: Hiromi Nagaumi, Department of Materials Science and Engineering, University of Science and Technology Beijing, Beijing 100083, China, Email:

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Description

Once two or more organizations get together to pursue mutually beneficial goals, a strategic alliance is formed. A strategic alliance may receive resources from partners in the form of goods, distribution channels, production capacity, project money, capital equipment, information, skills, or intellectual property. Strategic partnerships do not work for everyone. However, by forming strategic alliances, companies can expand into new sectors, improve their market share, add key personnel, and share the expense and risk of significant development projects. Through alliances, purchasing and supplying companies can pool their unique strengths, collaborate, and eliminate non-valueadding tasks to enhance performance.

There must be mutual advantage for both parties for this kind of connection to continue. Selecting the right partners for the intended goals, sharing the right information, negotiating a deal that includes risk and benefit, coming to a realistic understanding on the time frame, mutual, flexible commitment on everything that's suitable to change, measuring and sharing within each partner's culture, and respecting and protecting each partner's brand are some of the key elements of a strategic alliance. Setting up a strategic alliance involves choosing a partner, constructing the alliance, administering the relationship, and periodically reevaluating the alliance. Global strategic alliances and joint venture equity partnerships are two different types of strategic alliances.

Advantages strategic alliances

Strategic partnerships are frequently formed only when everyone involved benefits. These advantages can be categorized into four primary groups.

The first group consists of organizational benefits. To acquire the essential talents and competencies from your strategic partner, you may want to create a strategic partnership. Additionally, strategic partners might assist you increase productivity, offer a distribution network, or lengthen your supply chain.

A synergy may be created between a good or service your strategic partner offers and a good or service you offer. Having a strategic partner who is well-known and recognized will assist bring legitimacy and credibility to your enterprise if you are relatively new or untested in a particular market?

Economic advantage falls under a second group. By spreading out the expenses and risks among the alliance's participants, you may lessen them. In an alliance, you can also achieve larger economies of scale because the manufacturing volume can rise and lower unit costs result. Finally, you and your business partners can benefit from co-specialization, in which you combine your areas of expertise to provide value, as when a top computer maker combines its desktop with a top display manufacturer's monitor. Strategic advantages fall under a separate category. By combining resources and expertise, strategic alliances may also be helpful for gaining a competitive edge. Future economic opportunities as well as the creation of novel goods and technologies may benefit from this.

In order to access cutting edge technologies or to undertake joint research and development, strategic partnerships may also be utilized. The category of political advantages comes last. Sometimes, in order to enter a foreign market due to local prejudices or legal entrance restrictions, you must build a strategic alliance with a local foreign enterprise. Making strategic relationships with powerful political allies may also help you gain more clout and influence.